Monday, October 27, 2008

Collapse of the global financial system

The global financial system has collapsed. This has been acknowledged by the leaders of Asia and Europe at their meeting in Beijing. In their statement after the meeting, they pledged to rebuild the global financial system. President Sarkosky of France is providing the leadership.

The pillars of the collapsed system are:

> free market
> minimal regulation
> excessive leverage
> financial engineering
> non-regulated derivatives and swaps
> excessive reliance on private capital
> unsound banking system
> excessive rewards for corporate leaders

What will the new global financial system be based on? The leaders did not provide sufficient details. We must be ready to think of a new paradigm.
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5 comments:

ym said...

again i'm preaching to abolish :
- artifical setting of interest rates and forex rates by central banks
- fractional reserve lending by private banks
- government interventions and bailouts

October 27, 2008 7:06 PM
Anonymous said...

Dear Mr Tan,

Is it risky to buy the bank preference shares now to keep for next 5 to 10 years as the yield is around 5.5 to 5.8%.

Thank you.

October 27, 2008 8:56 PM
Anonymous said...

the crux of all this problem is "risk-transfer".

The sub-prime risks were transferred to so many parties...when the assets collapse, everyone collapse.

October 27, 2008 9:19 PM
Anonymous said...

the president of france name starts with S, not Z.

October 27, 2008 9:28 PM
Anonymous said...

his name starts with N, not S, not Z

sometimes i really wonder why seemingly informed ppl can claim they can be cheated

October 28, 2008 9:18 AM

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